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Great Depression
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Irving Fisher's debt deflation arguement
Irving Fisher's debt deflation arguement
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coffeym
4/17/09
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Economist Irving Fisher argues that debt deflation played a significant role in the Great Depression. He says that loose credit and over-indebtedness fueled speculation and asset bubbles.
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splizxer
4/17/09
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He named a 9-factor chain of events that led to the Great Depression:
1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.[27]
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